Lithuanians hand Russian hawk second presidential term

By bne IntelliNews May 27, 2014

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Following a second round runoff, Dalia Grybauskaite was confirmed as having won the first consecutive presidential term in Lithuanian history on May 26. The result illustrates, despite the tough austerity of her first term, that Lithuanians support her hawkish stance towards Russia and drive to plug the Baltic state deeper into Europe.

In an election dominated by concerns over Moscow's foreign policy, as it uses military threat and support for pro-Russian militants in efforts to carve up Ukraine, the staunchly pro-European Grybauskaite came up just short of a first round victory earlier this month. In the face-off she won 57.9%, as Lithuanians also voted in European Parliament elections on May 25. 

Zigmantas Balcytis, the candidate from Prime Minister Algirdas Butkevicius' Social Democrats, won 40.1% of the vote. He pulled in the vast majority of support from the rest of the fractured field in the first round, after having polled just under 14% on May 11 - the same day that pro-Russian separatists in the east of Ukraine held an internationally condemned referendum on independence. 

While austerity in the wake of the Baltic drop into an economic abyss in 2009 accompanied much of Grybauskaite's first term, recent years have been dominated by her confrontational stance towards Russia, which holds no little sway over the region thanks to its history inside the USSR. In particular, a large Russian minority and disconnection from European energy networks keep Lithuania, Latvia and Estonia on edge.

Grybauskaite has proved probably the most hawkish of all world leaders during the Ukraine crisis. "Europe must understand that Russia is trying to redraw the post-war map and borders," she said following the first round of the vote, according to AP. "First, it's Ukraine; Moldova will be next and, finally, it can reach the Baltic states and Poland. This is serious threat to our region." During the campaign, the incumbent called for the government to raise defence spending immediately, even at the cost of budget discipline. "We are in a vortex of threats today," she said during presidential debates last week, reports Reuters.

Political clout

Despite having started her political career coming from the left of centre, Grybauskaite developed her stern approach to Russia alongside the centre-right government of former prime minister Andrius Kubilius, which launched a confrontational programme to reduce Moscow's dominance of Lithuania's energy markets. The population tired, however, of the harsh economic austerity applied by Kubilius and replaced him with Butkevicius in late 2012. 

The new PM arrived talking of a "more pragmatic" approach to the Kremlin. However, false promises on gas, difficulties controlling the cabinet on energy, and practical "economic war" - as he described a Russian ban on dairy products and a customs regime that saw thousands of Lithuanian trucks stranded late last year - appear to have convinced him otherwise. 

Grybauskaite was also front and centre in November last year as Vilnius - holding the rotating EU presidency - pushed Ukraine's former president Viktor Yanukovych to sign off on a political and trade pact with Brussels. The protests in Kyiv that were sparked when - under pressure from Moscow - he backed out of the EU deal led to his ousting in February.

Analysts have little doubt Grybauskaite will continue driving hard to plug Lithuania ever deeper into Europe. "Grybauskaite is an independent candidate, but her policies are generally aligned with a centre-right political agenda," writes Otilia Dhand at Teneo Intelligence. "In her new term, she will likely continue to push for stronger economic relations with the Nordic countries, actively pursue increased NATO involvement in the Baltics and maintain close links with Brussels."

"In terms of energy policy, Grybauskaite will likely continue to support infrastructure projects decreasing Lithuania's dependence on energy imports from Russia (such as the Klaipeda LNG terminal, the Visaginas nuclear power plant, and the electricity interconnectors with Poland and Sweden)," she continues. "While Lithuania's constitution assigns only a relatively limited role to the president in terms of policy design, Grybauskaite's political clout and electoral support provide her with substantial informal influence on governmental policies."


While officially an opponent, Butkevicius has found no little success following her policies towards Russia. He has had the Baltics' first planned liquefied natural gas (LNG) terminal and a couple of international arbitration cases among other leverage to fall back on, and earlier this month announced Vilnius has secured a gas price discount from Gazprom. 

Lithuania has previously complained that it pays the highest price for Russian gas in Europe. Vilnius also took control of national gas utility Lietuvos dujos and pipeline operator Amber Grid on May 22. Russian state giant Gazprom, which bitterly fought against the move for years, is now a minority partner.

On May 26, Butkevicius announced that Vilnius has now chosen Norway's national gas company to supply the LNG platform when it comes online at the turn of the year. "Litgas has been instructed to negotiate with a single company, Statoil," he told a news conference, according to BNS. The deal is expected to be finalised by the end of June. Litgas previously said it was negotiating a five-year deal to import 0.54bn cubic metres (cm) of gas annually starting from 2015. Lithuania currently consumes just under 3bn cm per year.

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